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EPRINC studies energy economics and policy issue with special emphasis on oil, natural gas and petroleum product markets. We provide objective and technical analysis on a wide range of energy issues.

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Chart of the Week

Emissions Of Current Popular Vehicles and Required 2032 Compliance Levels

Legacy Petroleum-Powered Vehicles, Even with Aggressive Technological Advances Alone, Are Not Expected to Achieve These Standards

As the Senate Judiciary Committee is taking up a vote on NOPEC, EPRINC is re-releasing this 2019 article published in Real Clear Energy on NOPEC legislation.

“The legislation would remove a long standing practice that grant nation-states freedom from legal jeopardy under established “Sovereign Immunity” provisions in U.S. and international laws. While undertaking measures to stop anti-competitive practices seems like a good idea, the legislation is bad law and unlikely to achieve any of its goals.”
As oil prices rise and energy security risks lead to supply shortages, we are reminded that EPRINC Distinguished Fellow Rafael Sandra has been alerting us to the oil supply issue for a long time. EPRINC is re-releasing his April 2021 paper, “With Global Oil Demand on the Rebound. What About Supply?” in the hopes that it helps answer some of the questions facing today’s world.

EPRINC’s Max Pyziur was quoted extensively in the Miami Herald’s article “What Does Biden’s Ban on Russian Oil Imports Mean for People in the U.S.? What to Know“. The article was published on March 8, 2022.

A quote from the article:

“We are in a situation of war. This isn’t just an isolated event in Eastern Europe. This is something that affects the world,” Pyziur said. “It’s going to impact living standards. It’s going to impact national security, it’s going to impact food security, it’s going to impact energy security – all these things.”

Today on February 25, 2022, LNG Allies was joined by the Energy Policy Research Foundation, American Exploration and Production Council, and the Energy Equipment & Infrastructure Alliance in a letter addressed to the Biden Administration expressing increasing concerns on U.S. and European Energy Security. A brief summary of the suggestions in the letter is below:

  • Publicly signal support for domestic natural gas and oil production.
  • Set up a joint EU-U.S. Emergency Energy Infrastructure Council to have new “virtual transatlantic gas pipelines” in place as soon as possible.
  • Instruct DOE Fossil Energy and Carbon Management Office to immediately approve the U.S. LNG export applications pending before it to export gas from the United States to America’s willing partners and allies around the globe with an urgent focus on the applications that have already been approved by FERC.
  • Ask FERC to act within six months on all pending U.S. LNG export facility and gas pipeline applications needed to move more natural gas to domestic customers and LNG export terminals.
  • Immediately release the $300 million in funding that the U.S. promised in 2020 to the Three Seas Initiative Investment Fund to build critical natural gas and other energy infrastructure along the North-South corridor in Central and Eastern Europe.

https://lngallies.com/energysecurity/

 

 

 

On February 25 2022 at 8:30am–11:00am (Tokyo Time – JST) / February 24 6:30pm–9:00pm (Washington Time – EST), IEEJ and EPRINC cohosted a webinar, “LNG: Addressing the Near-Term Energy Crisis and Long-Term Environmental Challenges.”

The post-pandemic world has now moved to a global energy crisis, price shocks, supply shortages, and a geopolitical standoff in Europe. The IEEJ/EPRINC workshop explored LNG’s role in policy strategies to both address the crisis and examined its longer-term role in the energy transition to a lower-carbon future. It will also included a discussion on the potential role of ammonia in the transition.

Speakers included Chairman and CEO of the Institute of Energy Economics Japan (IEEJ), Tatsuya Terazawa;  President of EPRINC, Lucian Pugliaresi; former U.S. Secretary of Energy Dan Brouillette; LNG Allies President Fred Hutchison; Tellurian President and CEO Octávio Simões, EVP at Diamond Gas International Japan Branch Tetsuya Nishigaki; the Japan Gas Association General Manager Yuji Kumai, JERA General Manager Kenji Takahashi, and others as well as U.S. and Japanese industry leaders, experts from think tanks, the Institute for Energy Economics Japan and the Energy Policy Research Foundation for a discussion on role of LNG addressing the worldwide energy crisis and long-term environmental challenges.

The agenda from the event can be found here, and the presentations are located here. The link to view the recording of the webinar is here.

On Wednesday, February 16 2022, EPRINC President Lucian Pugliaresi testified before the Senate Committee on Environment and Public Works at a hearing called “The Environmental Protection Agency’s Renewable Fuel Standard Program: Challenges and Opportunities.” Lou was joined by Cory-Ann Wind from the Oregon Department of Environmental Quality, Emily Skor from Growth Energy, and LeAnn Johnson Koch from Perkins Cole, LLP. Lou’s testimony was later extensively quoted by Politico’s E&E News (link is behind a paywall), and one of the highlights of these quotes was:

“The principal drawbacks and risk factors of the program are not the use of biofuels as blendstock for gasoline and diesel fuel, but the statutory mandate which requires ever-larger blending volumes without regard to market conditions, costs or technical constraints,” Pugliaresi said. “Price risks to consumers from higher transportation fuel costs rise substantially as mandates push biofuel blending above 10 percent of the gasoline pool.”

The link to the full video of the event and each testimony is here, and Lou’s testimony can be found here.

On Thursday, January 20, 2022, at 12:00 pm EDT, the Subcommittee on Energy and Mineral Resources hosted a remote oversight hearing titled, “What More Gulf of Mexico Oil and Gas Leasing Means for Achieving U.S. Climate Targets.” EPRINC President Lucian Pugliaresi was one of the witnesses called to testify at this hearing, and in addition to his testimony he was asked many questions by committee members. His testimony as well as the accompanying slides are found here, and a full video of the hearing is here. The EMR website has full information about the hearing at this link.

In addition to his testimony, Lou was asked several questions for the record by Republican Members after the hearing was over. His response to those questions can be found here.

EPRINC has cohosted a webinar with the Global Gas Centre (GGC). The workshop was held on February 2, 2022 at 9:00 to 11:30 AM (Washington time) / 3:00 to 5:30 PM (Geneva time).

Recent power failures in the U.S. have raised public concerns about the stability and resilience of North American electricity grids. Spiking energy prices in Europe and ongoing constraints in natural gas supplies are pointing to a sustained crisis on the European Continent. While no single event can be identified as the primary cause of this turmoil, energy policies have played an important role and hold lessons for policy makers on both sides of the Atlantic.

Speakers included former U.S. Secretary of Energy Dan Brouillette; former Chairman of the Federal Energy Regulatory Commission (FERC), Neil Chatterjee; Arno Büx from Fluxys, European Natural Gas System Operator; Thomas Popik, Chairman and President, Foundation for Resilient Societies;
as well as U.S. and European industry leaders, experts from think tanks, the Global Gas Center and the Energy Policy Research Foundation. The discussion covered growing pressures on energy markets in the U.S. and Europe and what lessons policy makers should take from these developments.

A video recording of the workshop can be found here. Presentations from the event are here, and the event agenda is here. A report and overview of the workshop is here.

As 2021 draws to a close and 2022 is approaching, Season’s Greetings from EPRINC!

The U.S. Strategic Petroleum Reserve was developed to deal with specific sorts of national emergencies. However, numerous other alternative uses have been proposed, and even put into effect outside of true emergencies. EPRINC’s Emeritus President and current Trustee Larry Goldstein and Senior Director Max Pyziur present their analysis.

Like many of our treasured Main Street businesses, the past few years have been hard on these small fuel retailers. However, there may be even more factors pitted against them than other businesses. These factors are being overlooked by our political leaders and mainstream press. EPRINC’s Emeritus President and current Trustee Larry Goldstein briefly offers some explanations. His piece can be found here.

The Strategic Petroleum Reserve is in the news as President Biden announced a release of 50 million barrels into the market.
For those of you interested in all things about the Strategic Petroleum Reserve click on the following link.

On Tuesday, November 16 2021, EPRINC President Lucian Pugliaresi participated in a marathon hearing with the House Committee on Energy and Commerce. Some of the notable comments he made, pulling from EPRINC’s research on the ongoing energy transition, are listed below. In addition, the full testimony with charts is here and a video of the hearing in its entirety can be found here.

1. The Energy System is highly complicated, inter-connected regionally and globally in ways that are not always apparent. The energy transition presents a new set of supply and price risks for consumers and manufacturers. Fully implementing an energy transition over the next 30 years is neither easy nor can it be assured.

2. Achieving net zero in the developed world will reduce carbon emissions by only a small amount, likely no more than 20 percent of expected global emissions.

3. Regulatory programs as well as private sector commitments to accelerate the energy transition – whether it be mandates, targets, financial and procurement guidelines create uncertainty and financial risks that limit investment commitments to current legacy fuels, many of which are likely to remain in demand for years to come.

4. Most of the recent escalation in energy prices can be tied directly to dislocations in energy supplies (largely oil and gas) from the Covid-19 pandemic. However, government policies, such as the halt on leasing on federal lands, the cancellation of the Keystone Pipeline, the potential cancellation of line 5 from Canada, rising regulatory requirements and permitting delays are all threatening North American oil and gas production. We undermine this strategic asset at our peril if we abandon these fuels before the energy transition is well established.

5. Policy Matters. The US should see the current energy crisis in Europe as a cautionary tale and learn from it.

6. Policy initiatives that seek to accelerate the U.S. to a fully renewable energy complex will have global implications for energy security.

7. The transition will establish new environmental challenges and energy security issues in addition to the old.

The International Energy Agency (IEA), a collection of member countries formed in the 1970s to secure the energy security of the advanced Western democracies, is now calling for a halt to the development of new oil and gas resources as a fundamental strategy for addressing the threats from climate change.  The halt in development is viewed by the IEA as essential for the world to reach net zero carbon emissions by 2050. Michael Lynch, Distinguished Fellow at the Energy Policy Research Foundation, Inc. (EPRINC) points out the risks of such a strategy in his paper entitled Shifting Oil Industry Structure and Energy Security Under Investment Phase-Outs.  Since only private oil companies in the West are likely to respond, future oil supply probably would be dominated by Middle Eastern and Russian oil companies, mostly state-owned. Such a policy initiative, if successfully implemented, will see OPEC and allied producers (OPEC+) share of the world oil market supply rise to over 80% by 2040, degrading global energy security and severely limited the capability of the IEA to implement its Emergency Sharing System in the case of an oil crisis. The publication can be found here.

As the Covid-19 pandemic hit full stride the U.S. and world petroleum markets experienced unprecedented demand destruction in excess of ten million barrels per day. Many policymakers and some industry executives called for import quotas and other measures to disconnect the U.S. from world oil markets. It was a bad and counterproductive idea then and now calls by some policymakers to ban U.S. crude oil exports is an equally bad idea. In the article, Goldstein and  Pugliaresi point out that:
 
“The free movement of capital, crude oil and petroleum products remain critical to sustaining the productive capacity of the U.S. oil and natural gas industry. These efficiencies played a large role in the rapid expansion of U.S. oil production and remain one of the central reasons that large volumes of U.S. crude imports also result in large volumes of higher value added exports of petroleum products. We disrupt these flows at our own peril.”
The article published in Real Clear Energy can be found here.

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